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Sep 30, 2022
Reliance Steel Q3 2022 Earnings Report
Reported solid financial performance driven by its proven business model and strong operational execution.
Key Takeaways
Reliance Steel & Aluminum Co. reported strong Q3 2022 financial results, with net sales of $4.25 billion, a 10.4% increase year-over-year. The company achieved EPS of $6.45 and record quarterly cash flow from operations of $635.7 million. Despite declining metal prices impacting gross profit margin, the company's diverse operations and focus on customer service contributed to the positive results.
Net sales for the quarter reached $4.25 billion, a 10.4% increase year-over-year.
The company reported a strong EPS of $6.45 and a non-GAAP EPS of $6.48.
Reliance generated a record quarterly cash flow from operations of $635.7 million.
Approximately 1.9 million common shares were repurchased during the quarter for a total of $336.7 million.
Reliance Steel
Reliance Steel
Forward Guidance
Reliance expects healthy demand trends to continue into the fourth quarter despite prevailing macroeconomic uncertainty. The Company estimates its tons sold will be down 6.5% to 8.5% and non-GAAP earnings per diluted share in the range of $4.30 to $4.50 for the fourth quarter of 2022.
Positive Outlook
- Healthy demand trends are expected to continue into the fourth quarter.
- Stable pricing for higher value products sold into the aerospace, energy and semiconductor end markets.
- Toll processing services will remain solid in the fourth quarter of 2022.
- Semiconductor demand remained robust during the third quarter and continues to be one of Reliance’s strongest end markets.
- Demand in commercial aerospace will continue its steady improvement in the fourth quarter of 2022 as build rates increase.
Challenges Ahead
- Shipment levels will be impacted by normal seasonal factors, including fewer shipping days in the fourth quarter.
- Shipment levels will be impacted customer holiday-related extended shutdowns and vacation schedules.
- Tons sold will be down 6.5% to 8.5% in the fourth quarter of 2022 compared to the third quarter of 2022.
- Average selling price per ton sold for the fourth quarter of 2022 to be down 6.0% to 8.0% compared to the third quarter of 2022 driven by continued declines in pricing for many of its products.
- Continued pressure on its gross profit margin in the fourth quarter, which is temporary in nature and is a result of selling higher cost inventory on hand into a declining metal price environment.